Correlation Between Carl Zeiss and Ansell

Can any of the company-specific risk be diversified away by investing in both Carl Zeiss and Ansell at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Carl Zeiss and Ansell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carl Zeiss Meditec and Ansell Ltd ADR, you can compare the effects of market volatilities on Carl Zeiss and Ansell and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Carl Zeiss with a short position of Ansell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carl Zeiss and Ansell.

Diversification Opportunities for Carl Zeiss and Ansell

0.0

Correlation Coefficient

Carl Zeiss  Ansell

Pay attention - limited upside

The 3 months correlation between Carl and Ansell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carl Zeiss Meditec and Ansell Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ansell Ltd ADR and Carl Zeiss is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Carl Zeiss Meditec are associated (or correlated) with Ansell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ansell Ltd ADR has no effect on the direction of Carl Zeiss i.e., Carl Zeiss and Ansell go up and down completely randomly.

Pair Corralation between Carl Zeiss and Ansell

If you would invest  4,733  in Carl Zeiss Meditec on December 28, 2024 and sell it today you would earn a total of  2,320  from holding Carl Zeiss Meditec or generate 49.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Carl Zeiss Meditec  vs.  Ansell Ltd ADR

Carl Zeiss Meditec

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carl Zeiss Meditec are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Carl Zeiss showed solid returns over the last few months and may actually be approaching a breakup point.

Ansell Ltd ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ansell Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Ansell is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carl Zeiss and Ansell

The main advantage of trading using opposite Carl Zeiss and Ansell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carl Zeiss position performs unexpectedly, Ansell can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ansell will offset losses from the drop in Ansell's long position.

The idea behind Carl Zeiss Meditec and Ansell Ltd ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.